Europe Finishes Strong

MV Financial1.03K FollowersFollow5ShareSavePlay(6min)CommentsSummaryEuropean bourses started 2025 on a strong note, and they are finishing strong.The sustained outperformance of European equities caught a number of market observers by surprise.Barring some entirely unexpected development between now and December 31, European equities will see out the year with a healthy record of outperformance.Currently, the total return for the MSCI Eurozone Index, which tracks the performance of stocks in the single currency region, is up around 39 percent versus 19 percent for the S&P 500. ismagilov/iStock via Getty Images It has been something of a rite of passage in recent years. As the year gets underway in January, the financial chattering class lands on the age-old question. Is this Europe’s year? Is it time for portfolio managers toThis article was written byMV Financial1.03K FollowersFollowMV Financial is a Washington DC-area asset manager offering investment advisory services through MV Capital Management, a Registered Investment Advisor. We specialize in deep research across a wide range of asset classes and investment vehicles, with the goal of transforming knowledge into actionable investment solutions for our individual, family and institutional clientele.Quick InsightsWhat drove European equities' outperformance over the S&P 500 in 2025?A combination of a 13% euro appreciation and approximately 7% pure equity outperformance fueled European equities' 20% return differential over the S&P 500.Is the recent outperformance by European equities likely to persist into 2026?Short-term outperformance is uncertain, but structural changes support a medium- to long-term case for more non-US diversification.How should investors approach geographic allocation given recent performance trends?Current conditions warrant increasing portfolio geographic dispersion, as the global environment favors diversification beyond US dollar-denominated assets.Recommended For You